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For the second year in a row a court has decided that a Thunder Bay woman suffering from chronic pain can deduct the cost of spending the winter in a hot climate.

In the latest decision, the Tax Court of Canada has overturned a Canada Revenue Agency ruling, allowing Trudy Tallon to claim a medical expense tax credit of almost $17,500 for her winter spent in Thailand and Indonesia in 2009. These expenses included flights, accommodation and meals for her and her husband.

Tallon was successful in a previous appeal when the Tax Court permitted her to deduct similar expenses of $22,510 incurred in 2008.

This decision shows that the courts are frequently more sympathetic to taxpayers than the CRA and want to give them the benefit of the doubt. Therefore if a claim for a tax credit or tax deduction is turned down, it may be worth it to appeal the decision.

In 2009, Tallon and her husband David Bullough wanted to spend the winter in the Dominican Republic, but they discovered the weather was not consistently hot enough to relieve her pain. So between January and May 2009, they spent time in Thailand until their visa ran out and then in Indonesia.

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Evidence at the trial revealed that previously Tallon and Bullough visited Cambodia, Vietnam, Malaysia, Philippines, Burma, Ecuador, Venezuela, Honduras, Costa Rica and India to alleviate her condition. She testified that travelling to the United States to beat the cold weather was not an option because it was not warm enough and the medical costs were too high.

The Crown argued that Tallon should not be allowed to claim the tax credit because the purpose of her trips was not to get ‘medical treatment.’ Attendant costs for her husband were also challenged because she had previously travelled on her own to Texas for treatment.

Justice Judith Woods ruled that the term ‘medical services’ was broad enough to cover travelling to a warm climate for medical reasons. She was also satisfied that although Tallon could travel alone on a short trip to Texas for a medical appointment, a winter-long journey was an entirely different matter.

The judge was troubled by the number of countries Tallon and her husband visited over the years. That left the judge with the impression they were not selected solely for medical reasons. However, she ultimately decided in her favour because the crown didn’t make the case that the locations or the amount of her expenses was unreasonable.

Matthew Williams, a Toronto partner with the tax law firm Thorsteinssons says it is surprising the Crown did not attack the reasonableness of Tallon’s $17,500 claim for a medical expense tax credit.

“He did not look at where she went or if there was a cheaper alternative where her medical needs could be met,” he says.

Nevertheless, he says, “These are not hard and fast rules. They are subject to interpretation. It is certainly worth trying to get a more liberal interpretation from the courts than you would from the Canada Revenue Agency.”

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